The Blog

The Patient as Profit Center

NNU Blog, 7/18/12

Why would a company pay an estimated $10 million for access to a patient population? Not the brick and mortar of facility building, nor its machines, computers or other hardware? The answer: the billing opportunity. This is the business model of DaVita, Inc., a Colorado-based for-profit healthcare company that owns and operates more than 1,800 clinics across the U.S.—and some in foreign countries, too.

DaVita entered the healthcare scene in 2000 on the wave of aggressive mergers and acquisitions in the health realm on Wall Street. It’s been a bonanza, with DaVita’s CEO, Kent Thiry, pocketing hundreds of millions personally. The company’s stock hit a high in May, $98 a share, as investors, including billionaire Warren Buffett, continue to show confidence in the model.

Unfortunately – for patients and for NNU and the Maine State Nurses Association members – that model may now include the kidney care of about 220 patients receiving dialysis through Eastern Maine Medical Center in Bangor, ME. DaVita is in the process of “buying” the dialysis center. A regulatory process is far along in which the state’s Department of Health and Human Services must okay the deal. NNU and MSNA has stepped up to criticize and object. On July 10, NNU and MSNA staff and members presented testimony before the state, citing DaVita’s record of poor quality and marginal practices. In particular, NNU and MSNA cited the high mortality rate the dialysis industry has achieved during which DaVita, and one other large for-profit outfit, Fresenius, have reigned. The two stock-exchange companies control 80% of the U.S. market today.

On behalf of DaVita, one executive stated that DaVita’s dialysis patient mortality rates are among the best in the country. The problem, however, is that those rates overall are extremely poor, DaVita included. At this time, patients in dialysis average just five years of life.

“DaVita”, by the way, means “to life” in Italian.

NNU and MSNA are submitting documentation, testimony and other materials to Maine state authorities in a continuing effort to block the sale. At a minimum, patients and their families will be aware of the inner-workings of a business model that puts profits above all else.